Rural and Regional Affairs and Transport References Committee 04/07/2013 Review of the citrus industry in Australia

POULOS, Mr Con, Chairman, South Australia Region, Citrus Australia

[11:29]

CHAIR: Welcome. You have lodged submission 19 for the South Australian region of Citrus Australia. Do you want to make any amendments, alterations or additions?

Mr Poulos: I will make a brief one. I had a longer one, but I will cut it back so we can have more time for questions.

I am a citrus and wine grape grower. As you have read in our submission, we are now the peak industry body for our state since the two previous bodies have wound up. We are relatively new, having first met as a committee in September last year. I briefly want to explain what our situation is currently as opposed to how the previous bodies represented the SA industry. As best I can work out from the most recent annual reports of the previous two industry groups, between them they had an annual expenditure budget of approximately $700,000, with around five to six full-time staff. In contrast, due to the transition period and the collection of contributions to the citrus growers' fund, we have run the new peak state body for the first 10 months on a budget of around $16,000. In the same period, the value chain coordinator, whose job was to be a liaison between the national body, our committee and industry, retired. We are right now in the process of forming our first annual budget with a majority of its funds filling this vacancy. The total available funds going forward will be just over $100,000 per annum.

Some of the challenges we face in providing a similar level of service to industry are that we are a group of volunteer committee members, we have no office, we have a budget to work with that is a fraction of our predecessors' and we also have no access to any of the previous boards' databases, which include planning information and contact details of over 400 growers, who are the very people we were established to represent. That is what we have had to start with.

CHAIR: All right. You are the voluntary chairman of Citrus Australia South Australia. Are you going to employ anyone?

Mr Poulos: We are putting in our first budget now. The majority of the funds will go to a joint funded position that we will partly fund.

CHAIR: One of the things that is wrong is that there is not a single, solitary soul in the government who lives or makes a living in the bush. The NFF have got down to seven people. When a body like that speaks, rural Australia thinks that is the gospel; but, if you have not got the resources, it can often be far from the gospel. You are going to be in the same position, aren't you?

Mr Poulos: I think we are going to find that the citrus growers in South Australia are expecting the same sort of representation that they had. Even in the end it got a bit dysfunctional and things like that.

CHAIR: But if someone does not fund you then the outcomes that you deliver with no funds, no resources, no research, no brains and no finances—because you cannot afford the brain, the thinkers, the plotters and the deceivers—will run off a cliff.

Mr Poulos: It has been difficult till now. We have had to be creative with what we can spend our money on.

CHAIR: How do you match a lobbyist going to the government to change their view on a chemical in citrus?

Mr Poulos: The way we have been set up, the structure is we rely back to the national body now. We are a subcommittee of Citrus Australia.

CHAIR: Aren't you being set up to fail?

Mr Poulos: I would not have thought so.

CHAIR: If you have no resources—

Mr Poulos: Resources are stretched.

CHAIR: it is unreasonable until you dig down into this stuff—and the NFF is a really good example. People expect it to happen but they do not want to help make it happen.

Mr Poulos: This is where, as I have said, we have had to be creative because of what we have been given.

CHAIR: Yes, but either the industry gets together—whether it is behind you or behind whoever—or otherwise. Could I trouble you with something? I am very high tech!

Senator STERLE: We're in trouble now. He got this for Christmas and now we're all the wiser for it!

CHAIR: This is what we are up against. On this is an assessment made by a company wanting to invest in Brazil. It gets down to political risk and stability. This is a professional group making an assessment of investing in Brazil. There is a whole lot of stuff, pages of it. It says:

Political Risk/Stability—Brazil's government—

this is six years ago—

is overrun by corruption. The majority—

of a certain party that I will not name—

is being tried for various crimes. This is causing political risk which in turn causes political instability.

The one thing you can be sure of as an industry is that there is no endemic corruption politically in Australia federally—this is not at state level and not at local government level as there is plenty of corruption, as there is in Asia. If you want to do business in Asia you can get anything you like if you pay them enough money. They will sign anything. But it does not apply here. So we can do our bit but you have got to do your bit as it is.

Mr Poulos: That is right.

Senator RUSTON: Can I go back? All the way through the evidence that we have received for the last day and a half this recurring theme of regionality has been coming out, and obviously you are best placed to talk about regionality in South Australia. Take your organisation, albeit cash strapped. If there is an issue that is specific to South Australia, and I raise fruit fly because of the obvious reasons, what is the mechanism? How do you, as a regional body, get something that is of the highest priority in South Australia to become the highest priority on a Citrus Australia agenda?

Mr Poulos: I will give you the structure of what we do. We meet once a month and we normally have a representative from the national body there and we talk about it. Because we are so new we have not sat down and formally written up all of these policies. That is now our next step. Once we hit the ground running with some more money, some more funds, and we have a full-time position to help us out and do what we are doing, we will sit down to write these policies and then I, as chair, will take it straight to the board of Citrus Australia. It does not stop there. I cannot just rely on waiting for an answer back and things like that from the national body, so what I have done in the first seven months is jump in the car and drive to Adelaide, where I have met with the CEO of Biosecurity SA. I actually had a meeting with him yesterday. So we have put that as one of our priorities straight away. So, again, I have had to be creative and do things like that with the little bit of money that we have.

Senator RUSTON: So can I take it, in reading from that, that even though you are the advisory committee to Citrus Australia you and your committee have taken it on yourselves to actually undertake activities that are outside of that advisory role of Citrus Australia in respect of the issues of the South Australian citrus growers, so those issues that are specifically South Australian?

Mr Poulos: Yes, absolutely. It is a big priority for us, so it is my responsibility to go and do that.

Senator RUSTON: Do you think that Citrus Australia, in setting you up, thought that that was what you would be doing as well? Is that part of your charter or the terms of reference that Citrus Australia gave to you as an organisation?

Mr Poulos: We were not given that charter from Citrus Australia. We were given it by the working party that was formed by our state minister of agriculture. It was a group of growers and people from the predecessors of our board or committee that formed it. They formed the report, submitted it to the minister, recommending everything in there, and it was accepted.

Mr Poulos: They were chosen by a select committee. It had representatives from previous citrus boards, Citrus Australia. It was made up of, I think, half a dozen people. It was a select committee.

Senator RUSTON: So, once again, the levy payers in South Australia, who pay the levy to the PIF Scheme of the South Australian government, did not have any connection with the appointment of this board?

Mr Poulos: Not directly; it was not up for election or anything like that.

Senator RUSTON: So it was an appointed board as opposed to elected. Have you got any capacity in your structure to be able to apply directly to CAL for funding for projects that are specifically South Australian?

Mr Poulos: It is a good question. As far as I know, we are not incorporated; we are a subcommittee to the board of CAL. So any application would have to go through an incorporated body.

Senator RUSTON: So it would have to go through CAL. Is there anybody on the Citrus Australia board who comes from South Australia?

Mr Poulos: Because, as the previous speaker said, a lot of that information is collected under an act. We are not privy to any database they have. And that opens up a point. Who they are, their contact details, their names, their planting data, the number—we do not know who they are. This is one of the biggest issues we have. Part of our mandate is to communicate with contributors into our fund. Yet, at our very first meeting when we met with PIRSA in SA who went through the regulations and all that, one of the first things they told us that day was: 'We don't have access to who the growers are that fund us.'

CHAIR: No. Is there some background stuff going on here? What you have just told us is so vague and your title is so large that a person standing over there who did not know anything about this would think, 'He's pretty important! He is the chairman of—whatever; Citrus South Australia.' But when you open the door there is nothing there.

CHAIR: But what causes it? Are the Mafioso running the show? Who is running the show?

Mr Poulos: I do not know where you are coming from with that.

CHAIR: You don't?

Mr Poulos: No.

CHAIR: Having visited a couple of blokes in Carnarvon who used to be here, I do know where I am coming from, mate!

Mr Poulos: What I am trying to get at is: we are given a dollar per tonne for citrus that is grown in South Australia. Our big responsibility is to communicate back to those contributors what we are doing with their dollar. They are communicating to us what the issues are for us to look at.

Mr Poulos: We are not allowed to know who they are. I have been fighting the state government—

CHAIR: Shambolic rubbish!

Mr Poulos: from day one to release this information and they have actually gone to the point now that they informed me a month ago they are seeking legal advice to see what information they can release about—

Senator STERLE: Mr Poulos, can you understand me being completely confused? If you do not know who your members are, you do not know who could prospectively be your members. But you are taking information back to someone you do not even know? I am completely confused.

Senator COLBECK: Under the previous incarnation of what was going on, there were state statutory boards, and, as to funding, there was a levy based on those state statutory boards that came in, and that went into Australian Citrus, as it was?

Mr Poulos: As to the two previous, there was a statutory board and there was a growers group—two different funding models. One of the reasons we have gone back to a single body representing our state is to reduce the levy that growers in this state were paying. It has reduced from, I think, close To $4 a tonne to $1 a tonne. There were two different mechanisms for collecting that levy.

Senator COLBECK: All the information that was previously gathered was gathered under that statutory process that was managed not just in South Australia but by the other states, which gave you access to who the growers were, the scale, the produce—the whole shooting match?

Mr Poulos: And time lines. Yes.

Senator COLBECK: So in the change in structure of the industry—the transition from Australian Citrus to Citrus Australia—that occurred in 2008 some of those acts have been repealed?

Mr Poulos: Ours in South Australia occurred middle to late last year.

Senator COLBECK: So those acts were repealed and the capacity to collect and distribute the data has disappeared and that has contributed—this is my perception; let us put it in that context—to a lack of connection between growers, industry and what is set up to be the industry peak body.

Mr Poulos: Yes. The act in our state compelled packers to provide information on who their growers were and what they grew, which helped the previous board update its planning data and things like that. That act is no longer in place for us, no.

Mr Poulos: As far as I am aware, yes. If another state has a statutory board it can collect that information. It can compel people to give that information. We cannot; we ask for it to be given voluntary.

Senator COLBECK: By virtue of paying the levies under the previous process they were then part of that structure?

Mr Poulos: Yes. In South Australia growers were able to ask for a refund of both of the levies collected. If they were not happy with what the bodies were doing they could ask for a refund. We are under the same type of funding model now.

Mr Poulos: The refund rates were not high. I think they were quite high in the last financial year, but that could have had a lot to do with people realising that the board was going to wind up. I do not know. I cannot answer as to why people asked for a refund. But there was a very high refund rate last year, I think to the point that if the board had continued it may have gone into administration.

Senator COLBECK: So as far as Citrus Australia is concerned there is effectively no way to connect with certainty back to the growers?

Mr Poulos: Not with certainty. We cannot compel pack houses and growers to provide all of the information about their plantings and tonnes produced per variety. We do not have that mechanism anymore.

Senator COLBECK: That then impacts on the capacity to have a good understanding of industry, growers, scale and production and potentially impacts on the capacity to have a good understanding of what might be needed as far as R&D is concerned?

Mr Poulos: Yes, exactly right. We have started developing our own database. We have a fair bit of planning data that the national body had previously, but I cannot say it is 100 per cent accurate.

Senator COLBECK: It would be a fairly significant job and a pull on resources to continue to maintain and update that. It would be a fairly big task to continue the process.

Mr Poulos: It would be, yes. We are going to be funding a new position, to have someone on the ground. As I said, we do not have an office or full-time staff or anything. This new position will basically be a full-time position looking after the industry in South Australia.

CHAIR: What does 'looking after the industry' mean?

Mr Poulos: They will be a go-to between growers and packers and our committee. The previous position would hold grower meetings and discuss new planting techniques, new registration requirements and things like that. It is a liaison. It is someone who works on the ground full-time and who will go to the packers every day and speak to them and get back to the growers and hold meetings and things like that. We do not have the capacity to do that.

CHAIR: The department of agriculture equivalent in South Australia does not take an interest in that stuff and you cannot ring it up?

Mr Poulos: They used to, but it is fair to say that funds have been withdrawn and they do not have the capacity any more.

Mr Poulos: No. In the Riverland, there was a research centre that was a massive facility that looked after a lot of agricultural groups, not just citrus. If you go there now you will see that this big giant facility is vacant. You would agree with that, Senator Ruston?

Senator MADIGAN: But you told us you get $1 per tonne and it is from the levy, and $1 into $100,000 is 100,000.

Mr Poulos: What I have stated is that we will have $100,000 of available funds. There is a collection levy that PIRSA charge. They collect the money on our behalf. When the first budgets were drawn up for us as a rough guide of what we will have to spend, the averages were between $130,000 and $150,000 a year. PIRSA will take an admin fee from that. So around $25,000 to $30,000 will come out of that for the pleasure of collecting the funds for us.

Senator MADIGAN: If you represent the growers and they are paying the levy, why can't you do that directly?

Mr Poulos: The way the primary industry funding scheme has been legislated, the minister for agriculture is the administrator of the fund.

CHAIR: It would probably cost more than $100,000 to collect the $100,000.

Mr Poulos: It is costing around $30,000 to collect the $100,000. PIRSA collect the money on our behalf from the packers.

CHAIR: How do you know it costs $30,000 to collect it?

Mr Poulos: They have told us that.

CHAIR: Who?

Mr Poulos: PIRSA.

CHAIR: You believe that, do you?

Mr Poulos: I have questioned it and their response was that it is in line with the other PIF schemes in South Australia. I have asked them to open it up to competition. I have asked them to let the national body collect it on our behalf. I do not got a response other than that I occasionally get a bureaucrat from PIRSA tell me, 'It is in line with the other PIF schemes. Move on.'

Mr Poulos: PIRSA is the Department of Primary Industries and Resources of South Australia.

CHAIR: I would venture that it costs more than $100,000 to collect it. I got a cheque in the mail the other day for $1.29 from an energy authority. I have hung it on the wall because it costs more than $1.29 to send the bloody thing. So I will venture it costs more. I would not believe it for a minute. They have people laying around and going home bored shitless every night having done nothing all day in the public service. That all gets costed out. It would cost more than $100,000, if they do it, to collect it. They are trying to justify it. It would be easier to just give you $100,000 and not collect it in terms of cost-benefit analysis. It is rubbish.

Mr Poulos: There are a few hoops we have to jump through. We have a five-year management plan. Every time we apply for funds they have to be in line with what that plan states. Their justification is that they need to look at the plan and make sure that what we are applying for matches up with what is in our management plan. They also have to charge an admin fees for collecting the money. Once a year there is a refund period for a month if growers were not happy with what their dollar was spent on. PIRSA will charge an admin cost to sit down and look at the refunds. They try to justify it. We just think it is a ridiculous amount of money.

Senator GALLACHER: We have heard overwhelming criticism of Citrus Australia. You set up the Citrus Australia SA division. So do you have a different view of Citrus Australia? Do you think they are actually doing useful work?

Mr Poulos: I deal with them almost on a daily basis. I find our relationship is really good. We have differed on a couple of points, and it is all healthy debate.

Mr Poulos: There is a lot of information they provide to South Australian growers. They work with the packers a fair bit to open up export markets. They recently held a variety day down our way to look at planting some new varieties. But, again, it is our job to go back to them and say what our issues are and say, 'Come over here and spend some time and talk to our region.'

Senator GALLACHER: So you are not negative about Citrus Australia. You obviously are supportive of them.

Mr Poulos: I am supportive of having a national body and having regional groups that feed into it. That makes sense to me: a single national structure and voice. I just find that we could do a lot more, as far as what our committee does is concerned, if we had more resources.

Senator MADIGAN: You said earlier that the previous statutory body was getting—was it $400,000?

Mr Poulos: It is hard to see how much the two previous bodies were getting collected from fruit and how much they were getting in HAL funding and things like that. But, between the two bodies, they had a budget of around $700,000 per annum.

CHAIR: How come it is hard to know that? If it is legit, there ought to be a paper trail.

Mr Poulos: You can look at their annual reports.

CHAIR: So you do not have the capacity to do that?

Mr Poulos: Yes, definitely. You can just look at—

CHAIR: So you could find out.

Mr Poulos: You can look at the annual reports online and see what their expenditure was. It is all itemised. It is all open and transparent on what they had and what they were spending.

CHAIR: Are you expected to do with $100,000 what they did with $700,000?

Mr Poulos: Growers, I think, are expecting the same sort of service, yes.

CHAIR: Best of luck. I realise you must be a very hot operator, because you do not have a jumper on! But I do not know whether you are that good.

Senator XENOPHON: Mr Poulos, thanks for your evidence. Can you just clarify something. You are saying that the state government will not release that information to you about who the members are or who the contributors to the fund are. Is that right?

Senator XENOPHON: So you are saying that, if you could overcome privacy concerns, it would be useful to know who was contributing to your body.

Mr Poulos: It would be great to be able to email every single contributor, tell them what we are doing and ask for—

Senator XENOPHON: Through you, Chair, I wonder whether the committee could consider writing to the South Australian government to ask them whether they are looking at it.

CHAIR: Yes.

Senator XENOPHON: Mr Poulos, I just want to raise briefly concerns that Mr Ron Gray, who gave evidence earlier today, had about the citrus industry. He has raised with me previously the issue that Citrus Growers of South Australia, which I understand has now disbanded, had $185,000 held in trust. That money was an asset of Riverland citrus growers. Do you know where those funds have actually gone? Have they gone to Citrus Australia? Have they gone to another fund? Can you enlighten us as to where those funds have gone?

Mr Poulos: Yes, I have looked into this. The money is still there. It is sitting in a trust called the Rex Andrew Trust Fund. It is looked after by a board of trustees, and as far as I know no money has been spent out of it.

Senator XENOPHON: Are there any criteria to spend that money for education, campaigns and generally to advance the industry?

Mr Poulos: Yes, it is for the benefit of the South Australian citrus industry.

CHAIR: So is it growing or is it shrinking? Do the board of trustees book up against it? Are they eating into it?

Mr Poulos: I have no idea, but they are getting back to me with that sort of information.

Senator XENOPHON: Could you let us know what the criteria are for the fund, to your knowledge, as to how the funds can be used for the benefit of the industry locally.

Mr Poulos: The first indications are that the balance of the fund is not to be spent. The interest that is earned on it every year is what people can apply for as grants.